Chapter 1
Federal Mortgage Laws and Consumer Protection Regulations
Course: Safe Mlo Prep
Subject: Safe Mlo Prep
Chapter: Federal Mortgage Laws And Consumer Protection Regulations
OVERVIEW
The mortgage industry is overseen by a network of federal and state agencies each with specific regulatory authority over different types of institutions and laws. Knowing which agency enforces which law and what powers each agency holds is essential knowledge for the NMLS exam.
- Why Regulatory Oversight Matters
The 2008 financial crisis exposed serious gaps in mortgage oversight — unqualified originators, predatory lending, and rampant fraud went largely unchecked. Congress responded with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 which created the Consumer Financial Protection Bureau as the primary federal consumer financial watchdog.
- The CFPB — Most Important Agency to Know
Created by the Dodd-Frank Act in 2010, the CFPB is the most important regulatory agency for MLOs: